You Are What You Eat

Sodexho Marriott cooks up changes in campus dining with an
inventive segmentation program.

Huntington College is a small, liberal-arts school, located in
Huntington, Indiana, not far from the Dan Quayle museum. Affiliated
with the Church of the United Brethren of Christ, the student body
tends to have a traditional, conservative streak - until it comes
to dining. That's what Sodexho Marriott, the campus food service
provider, discovered when it tried out a new marketing program to
uncover the dining preferences of Huntington students. Now, instead
of serving pita pockets or turkey sandwiches at lunch, the students
are treated to roast beef with carmelized onions on a baguette or
shrimp jambalaya with jalapeno cornbread.

How did Sodexho Marriott discover that many Huntington students
were craving adventurous new meals, rather than just the old
college favorites? Through an ambitious new segmentation program
called LifeSTYLING, Sodexho uncovered groups of students at
Huntington whose lifestyles and backgrounds strongly suggested that
they would enjoy more innovative dining options. By better
addressing the tastes and demographics of the students it serves,
Sodexho hopes to significantly boost sales.

LifeSTYLING is a proprietary tool which allows Sodexho to use
the zip codes of each student on a campus to segment the student
body into six different groups: Trend Setters, Star Gazers, Fun
Express, Time Liners, Metro Fusion, and Main Streamers. Each group
has its own set of lifestyle characteristics which determine the
type of menu items they like, brands they prefer, hours they want
to eat, and collateral marketing tools (such as promotional
displays) which would be effective in reaching them.

"I would have expected more than just six cluster groups, but
these six provided the clearest differentiation," says Meridith
Heckmann, senior director of market research, who spearheaded the
creation of LifeSTYLING at Sodexho's higher education division. "We
have yet to find a school where we have misrepresented the
composition of the student body using this system."

The two main variables among the six groups are the types of
cuisine they enjoy, from traditional to innovative, and the amount
of money they are able or willing to spend on meals, from
price-sensitive to price-insensitive (see chart 2). For example,
Trend Setters want innovative meals and don't mind paying more for
them, while Main Streamers are seeking traditional meals and value.
In addition to these two overriding variables, a host of specific
food and brand preferences provide a solid foundation to develop
menus and marketing direction on each campus.

So far, Sodexho has analyzed 35 campuses with LifeSTYLING and
has found that five main patterns in the mix of segments
predominate. For example, at Oklahoma City University, Star Gazers
account for 30 percent of the student population, Trend Setters,
another 30 percent, followed by Fun Express (20 percent), Main
Streamers (9 percent), Timer Liners (6 percent), and Metro Fusion
(5 percent). The main pattern here is Star Gazer, Trend Setter, and
Fun Express. Using the data from these three LifeSTYLING segments,
a Sodexho menu team came up with a distinct menu template to match
this pattern. The menus created for each of the five patterns are
named Contemporary, Global, Moderate Mix, Spectrum, and Classic,
and they reflect commonalities among the segments within each
pattern. While there are some basics that are `must-haves' among
all patterns, such as chicken noodle soup, these templates unveil
subtleties such as whether cheddar or gorgonzola cheese on the
burgers will appeal to more students at a particular school.

Sodexho has additionally used LifeSTYLING to analyze the retail
food court needs of five large public universities this past
summer, and is testing 27 more this fall. The results of this
analysis will be used to retool the mix of national brands offered
in the food courts, such as Burger King or Taco Bell, Jamba Juice,
or Starbucks.

Satisfying student palates is not only important to Sodexho, but
also to college administrators who sign the food service contracts.
Creating an attractive dining service operation is a key goal of
administrators, as it keeps students on-campus and contributes to
the overall college experience. "Eating is not just about food,
it's a social experience for the students," says Gene Kellogg, vice
president for consulting and business development at Sodexho.

The results of some LifeSTYLING analysis has served as a wake-up
call to some Sodexho district managers, such as Glenn Kvidahl at
Indiana State University. After running the zip codes of the
student body, Kvidahl found that while a large percentage of
students fell into gastronomically conservative groups, a
surprising 24 percent were Trend Setters. "When we looked at what
we were offering in the food court, it was all geared towards the
Main Streamers and Time Liners - Burger King, Taco Bell, Subway,"
he says. "Now we are looking into adding a brand like Starbucks
which will appeal to the Trend Setter." Sodexho is even considering
opening a kiosk to sell sunglasses in the retail food court to gain
a greater share of the Trend Setters' disposable dollars.

Of course, even Heckmann admits that LifeSTYLING cannot be the
only insight brought to bear on a particular campus. "We do
situation analysis on each campus also, and our unit managers fill
out copious amounts of information on each school," she says.

The intelligence that LifeSTYLING provides did not come easily;
creating a student-specific, food service segmentation tool was a
complex task. Work on the program began two years ago, when Sodexho
was searching for a "new millenium" strategy to increase sales at
existing accounts, land new contracts, and keep current clients
happy. Sodexho turned to customer segmentation, an increasingly
important tool to marketers as they try to build a seamless
framework between research, marketing, sales, and customer service
areas. Segmentation aids in this endeavor by grouping consumers and
businesses with uniform preferences, behaviors, or characteristics
into clusters, which can be targeted with similar products,
services, and customer service solutions.

Of course, Sodexho could have conducted extensive surveys on
each campus to glean dining preference data, but it would have been
expensive, time-consuming, and difficult to pitch to existing and
new accounts. In contrast, a program such as LifeSTYLING allows
mass customization for all existing accounts, as well as
prospective new ones.

Creating LifeSTYLING involved three major steps: Finding a
database of student information that would provide a deep enough
picture of student activities and brand preferences; crunching the
numbers to create the segments; and injecting data on food and
beverage tastes into those segments.

The initial data for the segmentation was gleaned from Student
Monitor's Lifestyle and Media Survey, one of the largest tracking
databases of intelligence on the college market, with a wide range
of information on student trends and lifestyles. In September of
1999, Sodexho teamed up with customer segmentation experts at
Claritas, a leading provider of database marketing services, who
used Student Monitor's data to create six major groups of students,
similar in activities, attitudes, interests, and product usage. In
order to easily sort students into their respective groups, the six
segments were linked to Claritas's PRIZM program, a widely-used
segmentation and targeting system that uses zip codes to cluster
consumers into one of 62 lifestyle groups. This enabled Sodexho to
quickly allocate any student to his or her lifestyle segment once
they knew the student's home zip code.

Next, Sodexho conducted an in-depth food and beverage survey of
several thousand students in the winter and spring of 2000, and
inserted the results into the database to determine each group's
preferences in areas such as portion size, taste, brands, hours of
service, portability, familiarity, price, and dining atmosphere.
And voila, LifeSTYLING was ready to be put to use.

While segmentation programs are used by numerous marketers,
Sodexho's effort is unique in that it applies this technique to the
niche market of college students. "This was a compelling and
effective way to place students into lifestyle-based segments
without surveying each student customer," says David Tedrow,
assistant vice president of analytical services at Claritas. "It
allowed them to take their primary research, the limited food and
beverage survey, and apply it to a much larger universe." The
program is also a creative example of how to use a systematic plan
of segmentation to address an area as idiosyncratic as food
preferences.

Now that the system has been tested on 40 campuses over the
summer, with more being added this fall, the real evaluation is
currently underway as students are back in schools, trying out the
altered menus, and as Sodexho begins changing the retail food
courts. "LifeSTYLING is a work in progress, and we are continually
gathering research to refine the program," says Heckmann. But
Sodexho has set ambitious goals for the project. Kellogg intends
for the program to result in a 100 percent sales increase in the
retail food courts over the next 3 to 5 years. Now that's a lot to
chew on.